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Solutions For Problem 1

The document provides income tax calculations for four different taxpayer statuses: 1) Resident Citizen - With various income sources, their total income tax expense is P262,500. 2) Non-resident Citizen - Their total income tax expense is P214,500. 3) Resident Alien - Their total income tax expense is P249,000. 4) Non-resident Alien - Only their taxable income is provided, no tax calculations.

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237 views

Solutions For Problem 1

The document provides income tax calculations for four different taxpayer statuses: 1) Resident Citizen - With various income sources, their total income tax expense is P262,500. 2) Non-resident Citizen - Their total income tax expense is P214,500. 3) Resident Alien - Their total income tax expense is P249,000. 4) Non-resident Alien - Only their taxable income is provided, no tax calculations.

Uploaded by

spongebob Squarepants
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Solutions for Problem 1:

Resident Citizen:
a. Taxable net income
Gross business income, Philippines P1,000,000
Gross business income, USA 500,000
Business expenses, Philippines (700,000)
Business expenses, USA (430,000)
Compensation income, Philippines 600,000
Dividend income from a foreign corporation 40,000
Interest income from bank deposits abroad 30,000
Royalty income from composition 25,000
Raffle draw winnings 10,000
Taxable net Income 1,050,000

b. Income tax payable


First 800,000 P130,000
In excess of P800,00 (250, 000 x 30%) 75,000
Tax due P205, 000
Less: CWT on business income 125,000
Income tax payable 80,000

c. Total final taxes on passive income


Dividend income from a domestic corporation (10%) 5,000
Interest income from peso bank deposit- Philippines (20%) 4,000
Interest income from FCDS deposits (15%) 6,000
Royalty income from composition (10%) 2,500
PCSO winnings (20%) 40,000
Total final taxes on passive income P57,500

d. Total income tax expense


Income tax payable P80,000
Total final taxes on passive income 57,500
CWT on business income 125,000
Total income tax payable P262,500
Non-resident Citizen:
a. Taxable net income
Gross business income, Philippines P1,000,000
Business expenses, Philippines (700,000)
Compensation income, Philippines 600,000
Royalty income from composition 25,000
Raffle draw winnings 10,000
Taxable net income P910,000

b. Income tax payable


First 800,000 P130,000
In excess of P800,00 (110, 000 x 30%) 33,000
Tax due P163,000
Less: CWT on business income 125,000
Income tax payable P38,000

c. Total final taxes on passive income


Dividend income from a domestic corporation (10%) P5,000
Interest income from peso bank deposit- Philippines (20%) 4,000
Royalty income from composition (10%) 2,500
PCSO winnings (20%) 40,000
Total final taxes on passive income 51,500

d. Total income tax expense


Net Income tax payable P38,000
Total final taxes on passive income 51,500
CWT on business income 125,000
Total income tax expense P214,500
Resident Alien
a. Taxable net income
Gross business income, Philippines P1,000,000
Business expenses, Philippines (700,000)
Compensation income, Philippines 600,000
Dividend income from a foreign corporation 40,000
Interest income from bank deposits abroad 30,000
Royalty income from composition 25,000
Raffle draw winnings 10,000
Taxable net income P1,005,000

b. Income tax payable


First 800,000 P130,000
In excess of P800,000 (205,000 x 30%) 61,500
Tax due P191,500
Less: CWT on business income 125,000
Income tax payable P66,500

c. Total final taxes on passive income


Dividend income from a domestic corporation (50,000 x 10%) 5,000
Interest income from peso bank deposit- Philippines (20,000 x 20%) 4,000
Interest income from FCDS deposits (40,000 x 15%) 6,000
Royalty income from composition (25,000 x 10%) 2,500
PCSO winnings (200,000 x 20%) 40,000
Total final taxes on passive income P57,500

d. Total income tax expense


Net Income tax payable P66,500
Total final taxes on passive income 57,500
CWT on business income 125,000
Total income tax expense P249,000
Non-resident Alien
a. Taxable net income
Gross business income, Philippines P1,000,000
Business expenses, Philippines (700,000)
Compensation income, Philippines 600,000
Raffle draw winnings 10,000
Taxable net income P910,000

b. Income tax payable


c. Total final taxes on passive income
d. Total income tax expense

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